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Workers are in line for a bigger-than-expected boost to their pay packets.

Fierce competition for labour has spurred faster wage growth that's tipped to reach four per cent through the year to the June quarter of 2024 - its fastest pace since 2009.

Treasury wage forecasts in the Albanese government's second budget are slightly higher than in the October edition, which foresaw the wage price index peaking at 3.75 per cent in the next financial year.

The government has taken some credit for the upgraded projections by funding a pay increase for aged care staff, along with advocating for a boost to minimum and award wages so low paid workers "don't go backwards".

A faster-than-expected slowdown in inflation is tipped to bring forward a real wage rise for workers, which is when pay increases are lifting faster than prices are rising.

Inflation is running at seven per cent and Treasury predictions have the consumer price index travelling down to six per cent over the year.

It's then expected to sink to 3.25 though to the June quarter of 2024 - lower than the October budget - and then to 2.75 per cent in through to the midpoint of 2025 - slightly above earlier forecasts.

Treasurer Jim Chalmers said the cost of living package was largely responsible for bringing inflation down quickly in 2023/2024.

The energy costs package alone - including bill relief for households and price caps on coal and gas - is expected to shave three-quarters of a percentage point off headline inflation by the June quarter of 2024.

"This budget has been carefully calibrated not to add to inflation it's responsible and targeted and spread across a number of years so it won't hit the economy all at once," he said on Tuesday.

Independent economists Chris Richardson said the government was right to support vulnerable households, such as boosting JobSeeker, but the budget still wasn't restrained enough to rule out further interest rate hikes.

"The budget does inject extra money into the economy. That will be spent," he said.

The treasurer defended the extra spending that had not been offset by cuts elsewhere.

"It depends on how you spend it, the quality of the spend," he said.

While the inflation fight was the frontline battle for Labor's second budget, repairing the budget position was also a pressing concern.

Fortunately, the government was gifted revenue windfall from low unemployment, strong jobs and wages growth, and sky-high prices for key exports, which have put Labor in the position of delivering a slender surplus of $4.2b.

The surpluses won't continue, however, with commodity prices expected to fall and the labour market to cool.

However, future deficits are tipped to be much smaller than previously forecasts, with the underlying cash balance improving by a cumulative $125.9b over the next five years.

The decision to bank 82 per cent of the tax upgrades has run down government debt considerably.

The budget is nursing a $887b debt this financial year and, while still an enormous sum, it's less than forecast in October.

It's still heading towards the trillion dollar mark, but that's been pushed back by two more years.

The outlook for unemployment remains largely unchanged but will be a quarter of a percentage point lower this year due to resilience in the labour market that's been supported by a swift rebound in migration post-pandemic.

Treasury's near term-growth forecasts are unchanged from October, slowing to 1.5 per cent in 2023/24 and then strengthening to 2.25 per cent in 2024/25.

After a few years of subdued growth, the ongoing population recovery - and the associated jump in home building to house the arrivals - is tipped to underpin 2.75 per cent growth in 2025/26 and 2026/27.

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Low-income Australians and children will be eligible for bulk-billed doctor visits with Medicare reforms at the heart of the federal budget.

Bulk billing incentives will be tripled for general practice consultations for children under 16 and concession card holders as part of a $3.5 billion commitment over five years.

The incentives will apply to all face-to-face consultations and telehealth services and give more than 11 million people access to a GP with no out-of-pocket costs.

Treasurer Jim Chalmers said the changes were the centrepiece of the budget and would ensure the quality of a person's health care was guaranteed by their Medicare card, not their credit card.

"One of the things that makes this the best country in the world is our shared belief that every Australian should be able to access affordable, reliable health care," he said.

"But right now, too many people are finding it more and more difficult to see a doctor."

Health spending makes up about a sixth of government expenses in 2023/24, totalling $106.5b.

An extra eight urgent care clinics will also be opened by the end of the year, taking the total number across the country to 58.

The $358.5m funding boost will ensure the clinics stay open for longer hours to relieve overstretched GPs and take pressure off hospital emergency rooms.

The commitments have been welcomed by peak medical bodies who say the government has delivered a promised health budget.

Royal Australian College of GPs president Nicole Higgins said the budget put patients first and the measures would help relieve pressure on the entire healthcare system.

Following recommendations from the Medicare task force, new funding has been allocated to motivate doctors, nurses and allied health professionals to work together.

More than $445m over five years will boost a workforce incentive program, encouraging general practices to employ more nurses and other health professionals.

Australian Medical Association Steve Robson said the program had been underfunded for years and the extra money would help GPs and help make care more convenient and accessible for patients.

The budget also locks in prescription changes from September to allow more than 300 medicines to be dispensed in greater quantities.

More than $1b over five years will be allocated to allow two months' worth of certain medicines to be dispensed by pharmacies at one time, saving some patients up to $180 a year.

New medicines will be added to the Pharmaceutical Benefits Scheme at a cost of more than $2b and an extra $449.4m has been allocated to add new listings on the National Immunisation Program.

Nearly $20m will be allocated over four years to establish the MyMedicare system, which aims to strengthen continuity of care and doctor-patient relationships.

Professor Robson said the association would examine the details of MyMedicare and work with the government to ensure it worked for patients and GPs and resulted in genuine health care improvements.

A Homelessness Support Program to help vulnerable people access primary care services will also be established at a cost of $25.4m.

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ENERGY BILL RELIEF

Who is eligible:

* Pensioners, veterans, seniors and other concession card holders.

* Recipients of the carer allowance and family tax benefit.

* People in existing state and territory electricity concession schemes.

In NSW:

* More than 1.6 million households and 300,000 businesses will be eligible for energy rebates in the next financial year.

* NSW households will receive $500 and small businesses can get a $650 rebate.

* The price relief rebates will be delivered via energy companies and applied automatically to energy bills.

In VIC:

* More than 1.27 million households and 236,000 small businesses will be eligible for energy price relief from July 1.

* Households will get a $250 annual energy rebate on power bills, in addition to the $250 power saving bonus that will continue.

* Households will continue to access support through year-round electricity concession and the winter gas concession.

* Eligible small businesses will get a $325 rebate, and will receive it automatically if they are a "small customer".

In QLD:

* More than 1.1 million households and 200,000 small businesses will be eligible for the energy bill relief from July 1.

* Households will receive an annual rebate of $500 and eligible small businesses can access $650.

* The rebates will be applied to household bills by energy companies.

* Small businesses who are classified as a "small customer" will get the relief automatically.

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Businesses struggling to make ends meet will be able to claim tens of thousands of dollars in tax incentives to drive down power bills and boost productivity.

Small business minister Julie Collins says they are "the lifeblood of our economy" and hopes the new measures will provide them with targeted, responsible support without adding to inflation.

Energy bill relief and tax asset write-offs will help tackle immediate challenges while investments in cyber security and cutting red tape aim to set up small businesses in the long term, she says.

In terms of immediate relief, one million small businesses will be eligible for up to $650 in power bill rebates from July, as part of a $3 billion relief package split with the states and territories.

The package will also be available to five million households, which can claim up to $500 in relief.

The entire energy relief plan, which includes the bill support and price caps on fossil fuels, is expected to shave 25 per cent off retail electricity prices and 16 per cent off gas prices.

A one year increase to the instant asset write-off threshold will enable businesses with a turnover of up to $10 million to deduct an extra $20,000 off their taxes.

Additional incentives will encourage small businesses to adopt new technologies and guard against the growing threat of cyber attacks.

Up to 3.8 million small and medium-sized businesses will be able to tap into tax deductions on purchases that bring down electricity prices and reduce emissions for one year from July 1.

The $310 million investment will allow businesses to deduct up to $20,000 extra per item to encourage upgrades to more efficient goods and electrification of assets, such as energy-efficient fridges and electric heating systems.

A new $392 million program to support small businesses to develop new products and services and $23.4 million in cyber resilience will further incentivise innovation.

The money will help train in-house "cyber wardens" to guard against security threats after several high-profile data breaches targeted Australian companies, including Medibank, Optus and Latitude Finance.

Red tape is also in the firing line, with the government promising to reduce the time small businesses spend doing taxes.

Five additional tax clinics will be set up starting in 2025 to help small businesses without easy access to professional tax assistance.

© AAP 2023